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Geothermal LCCA Analysis

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Comparative Analysis of the Life CycleCosts of Geothermal Heat Pumps and Three Conventional HVAC Systems for an Elementary School in Lincoln, Nebraska John A. Shonder Michaela A. Martin Patrick J. Hughes Oak Ridge National Laboratory

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Project Background• Four new, identical 69,000 ft2 elementary schools were built in 1995 in Lincoln, Nebraska• The decision to use geothermal heat pumps based on life cycle cost comparison using another school in the district• Pre-construction estimates contain a great deal of uncertainty. Would actual performance would bear out the initial assumptions, and confirm the technology selection?

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Objectives of the study• Use site-monitored energy use data to develop a calibrated simulation model of one of the schools• Implement GHPs and three alternative HVAC systems to determine annual energy and water use• Use maintenance data from the school district to estimate annual maintenance cost for each alternative• Develop estimates of installed costs for each alternative• Determine life cycle cost of each alternative

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Developed independent cost estimates for each system• Capital costs were estimated for each system by staff estimators, without reference to actual installed cost• Estimates then given a “reality check” by an experienced estimator familiar with school HVAC systems (including geothermal)• Estimates also compared to published square foot cost estimating guides

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Things to note about the capital cost estimates• Based on published figures for schools, the estimates appear reasonable• Excluding the constant volume system, geothermal has the lowest first cost• A cost of $9.45 per square foot was published for the geothermal systems. We were unable to determine what was included in this estimate• School district’s accounting system does not separate out the cost of HVAC from the entire school cost.

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Inputs for the life cycle cost analysis• Energy use for each system based on calibrated simulation models• Local Lincoln, Nebraska rates (gas, electric and water) used to calculate utility costs• Maintenance costs based on Lincoln School District database → first year + annual escalation• Capital costs of HVAC systems based on estimates performed by staff cost estimators• Real discount rate of 3.1%, DOE energy cost projections, 20 year equipment life

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Results of the analysis• Lincoln school district made the correct decision in installing GHPs in these four schools• Over 20 year life, GHPs have the lowest life cycle cost -- about $230,000 less than the next most economical technology• First cost is the most important factor in the analysis, followed by energy costs and maintenance costs.• Maintenance costs of GHPs in this district are marginally lower (about 6%) than the cost of maintaining VAV chiller/boiler systems.

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Results of the analysis• GHPs have the lowest annual operating costs• Of the system types commonly installed in schools, GHPs also have the lowest first cost• Reduced energy use reduces emission of greenhouse gases and other pollutants

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Conclusions• Obviously, these results apply only to the school examined• They confirm that GHPs can cause significant reductions in energy use (17%) and energy costs (24%)• They also counter some of the myths about GHPs: – No “cost premium” in this case. GHPs have lower first cost – Maintenance costs comparable with other common technologies